CAUSAL REASONING AND EXPLANATION IN DYNAMIC ECONOMIC-SYSTEMS

In this paper, we develop techniques for qualitative reasoning in econ omic systems. It is shown that qualitative economic reasoning can be f ormalised to the extent that qualitative behaviour and associated expl anations can be obtained which correspond to economic reasoning put fo rward by economists. Existing qualitative reasoning techniques are cap able of generating all possible behaviours of an economic system out o f which many have no satisfactory economic explanation. In order to co nstrain this intractable branching of behaviour, a heuristic filter ba sed on the causal dependencies in the economic system selects those be haviours which are meaningful from an economic point of view.